February 22, 2008, - 11:58 am

Schlussel-conomics: A New Way To Save on Food, Products

By Debbie Schlussel
If your budget is tight, as it is with me and so many other Americans, you might find this interesting. Maybe you already knew about it, but it’s new to me: “Salvage Grocers.”
We all know that there are dollar stores with closeouts, but that’s not what this is about. Apparently, there are many new chains popping up which sell goods that have just recently expired in terms of the “sell by” date, or which have a dent or slight damage to packaging. The foods are still good–we’re not talking about perishables like meat and dairy products–and the bargains sound incredible. It’s like a better, expanded version of the “day old bread” prices at the bakery. But there are some drawbacks, and you have to be a vigilant shopper:


When food prices began to jump last year, Dan McCauley started making weekly trips to SharpShopper, a no-frills discount store here that sells food makers’ surplus goods. On a recent weekday afternoon, the 50-year-old’s haul included two bags of Archway cookies for just $1 and two cases of Vitamin Water made by Kraft Foods Inc. for 25 cents a bottle.
Mr. McCauley didn’t mind that the “best if eaten by” date on the cookies was two weeks old. “A cookie is a cookie to me,” said the vocational-school teacher and married father of two. He says he has slashed his family’s grocery bill by 25% since he began buying more food at SharpShopper and less at Giant, a conventional grocer. . . .
Shoppers like Mr. McCauley are boosting sales at surplus or “salvage” grocers, a little-noticed segment of the food industry, at a time when U.S. consumers face the highest rate of food inflation in almost two decades, along with steep gasoline prices and a sputtering economy. . . .
Surplus grocers sell “closeouts,” which include products that manufacturers have discontinued, seasonal items that are outdated and goods that are near the date when manufacturers expect freshness to wane. Many such grocers also sell products that were damaged in transit but remain edible, such as a dented box of Cheerios. Prices tend to be significantly lower than those at conventional stores and big discounters like Wal-Mart Stores Inc.
Amelia’s, a chain with 11 surplus stores in eastern Pennsylvania, saw its sales jump 17% last year from a year earlier, says Mike Mitchell, president of the company. . . . “When the economy gets tight, we tend to attract new customers,” says Mr. Mitchell. “Groceries are one place where people can do things to save a lot of money.” . . .
Similar grocers in other parts of the U.S. report sales increases. Scott Godes, co-owner of So Low Grocery Outlet, a store in a low-income neighborhood in Minneapolis, says sales jumped 30% last year.
Grocery Outlet Inc., a Berkeley, Calif., operator of 131 surplus stores in the western U.S., has seen a steady increase in same-store sales since last fall, says Melissa Porter, vice president of marketing. Annual sales exceed $600 million at the closely held company. “We see a lot of new faces we haven’t seen before,” Ms. Porter says. “People are feeling poorer right now.” . . .
Surplus stores mainly draw middle- and lower-income shoppers, and many accept food stamps. They also attract people who just like to find good deals.
Take Joanna Stein, a 54-year-old retiree. On a February afternoon, she drove about 12 miles from her home in Exton, Pa., to an Amelia’s in Coatesville, hunting for bargains. Among her finds: four bottles of organic balsamic vinaigrette made by Kraft, all for $1. The bottles had a best-if-used-by date of Dec. 21.
Ms. Stein used to work in the food industry and says that products generally taste fine well beyond such dates. . . . Ms. Stein says she likes shopping at stores like Amelia’s because “you never know what you’re going to get.” . . . The chain is an authorized dealer for such food giants as Kraft, Kellogg Co. and Tyson Foods Inc. The stores also carry store brands made for retailers in other regions of the country. Amelia’s, for example, carries ice-cream bars made for Publix, a chain in the Southeast.
Shopping in salvage stores can carry risks. In 1999, Alabama’s agriculture commissioner found persistent problems with outdated baby food and formula sold at some salvage stores.
Shelley Hoober, a 56-year-old shopper at the Leola, Pa., SharpShopper, says she exercises caution when selecting products, noting that she bought a box of surplus cereal that turned out to be infested with bugs. “You have to really watch the dates,” she says. . . .
[On the other hand,] “It’s like Christmas every time,” says Leanne Silber, owner of Discount Food & More, a small . . . store in Pownal, Vt. . . .
Ms. Silber says her store is attracting more residents of her town of 3,400 since food prices surged. “I think people are becoming less worried about a crushed box and more about their bottom line,” she says.

With our abysmal economy in Michigan, the time is ripe for these stores here in the Detroit area. And sadly, the time is right for the rest of the country, too.
The TJMaxx of food.

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3 Responses

We have a very nice, 24 hour Kroger’s near our house. Always well lit, always clean, lots of nice extras (deli, bakery, coffee grinder, etc). Also expensive. I’d gotten used to the prices after shopping there for years.
Then we started going to a Food Lion. Less extras, more restrictive hours, less nice neighborhood. I still like the Kroger’s for produce and meat, but on everyday groceries, when the stuff is rung up I have a mental idea of how much it’s going to cost (based on the above years spent shopping at Kroger’s) and it’s always significantly less. Except for convenience trips and products I prefer from Kroger’s, the Food Lion has become our main grocery store, and we are probably $1,000 a year (after tax!) richer for it.

NeoConOne on February 23, 2008 at 5:04 am

When I was a kid(Pre-Great Society) & when daddy was out of work mama would go to the commodities store where they had gov’t milk,bread & chease, but they also had frieght damaged goods for pennies on the dollar. No one went hungry in our house then & I keep hearing of welfare homes doing without theses days. I don’t know if I believe it when I see so many obiese Welfare recipients.

HellDogger on February 23, 2008 at 9:10 am

If you live in California, Nevada, Arizona or Texas try the 99 cent only store. http://www.99only.com/
These are nice clean stores which now carry produce and refrigerated/frozen foods. These stores put The Dollar Store and Dollar General to shame.

ParaLyzer on February 23, 2008 at 2:47 pm

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